DEUN’s proposed solution

DEUN’s proposed solution is to treat mass-market (including domestic) electricity supply as a separate market requiring regulation. This will require amending the Commerce Act 1986 to restore the concept of electricity as an essential service.

A targeted control regime should identify excess prices and/or reduced quality, and identify where thresholds are being breached. Price regulation must be the sanction for persistent transfer of wealth from small consumers to suppliers, and to "competitive" consumers.

A simpler regulation system might be possible if the three publicly owned retailer-generators were combined. They could offer pricing to domestic consumers designed, by policy, to reflect costs instead of maximizing profits. This is already the rule for Transpower.

The mantra of “competitive” could still be maintained, with the remaining private companies invited to give better offers to their domestic consumers.

DEUN is very concerned about the proposal by the Ministerial Review of the Electricity Market to remove “fair” and “environmentally sustainable” from objectives to be met by the electricity market. The Electricity Act would have to be amended to make those changes.

Now, as Government is about to announce its response to the Review, is the ideal opportunity for the above suggestions to be properly debated.